Remodel or relocate?

Author: Marv Shidler
Last updated: June 3, 2009

If you are considering changing your living arrangement, you have only two options: renovate or relocate. Remodeling your home can mean investing significant sums of money, but if you love your home and neighborhood and plan on living there for ten years of more, you don't have to worry about the dollar return on your investment. If you don't plan on settling in your present location, you need to carefully weigh the dollar value against personal enjoyment. A renovation could easily price your home out of your local market.

Start by researching your neighborhood. Check real estate ads or online to find out how homes in your area are priced. Then pay attention to how quickly houses in your area sell. If this information is encouraging, then continue your research by carefully studying your proposed renovation. Not all remodeling projects are created equal.

Unless you are skilled and have generous time, don't consider doing the project yourself. The “do-it-yourself” look can only have a negative effect on the value of your home. Another pitfall to avoid is a design that clashes with the rest of your house or the rest of the neighborhood. The changes should blend so well with the old that you can't tell the difference.

Following is a list of the remodeling projects that typically give the highest return on your dollar:

Kitchens: 88% return

Kitchen improvements traditionally rate the highest in value and in buyer appeal. In the right home and neighborhood, the more money put into a kitchen, the more money the house can command on resale.

Bathrooms: 82% return

The value of a well-planned bathroom runs a very close second. This room has more potential, per square foot, than any other room in the house, though it also has the highest cost per square foot.

Great Rooms: 76% return

Adding or expanding a great room can give a good return for your investment because the cost of such a project is relatively low. It is recommended that a great room have at least 400 square feet with plenty of natural light.

Master Bedroom Suite: 72% return

Basements: 69% return

Refinishing a basement is a very popular project that most homeowners mistakenly assume is very inexpensive. The price of framing, electric, drywall, painting, carpet, etc. can quickly go beyond expectations. And if you add a bathroom, the price takes a giant leap higher. A basement that receives lots of natural daylight is the best investment.

Sunrooms: 60% return

Remodeling does not have to be a game of chance. It is hard not to enjoy improving your lifestyle at the same time as you increase your investment.